What to Watch in the Day Ahead - Wednesday, Feb. 4

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Merck & Co is expected to report lower fourth-quarter earnings, hurt by generic competition for
its Singulair asthma drug and its Nasonex allergy treatment. Investors will be paying far
greater attention to the No. 2 U.S. drugmaker's earnings forecast for 2015, and whether it will
be badly dented by the stronger dollar. Focus will also be on company's comments on progress in
testing its array of experimental drugs, especially its cancer treatments that work by
harnessing the immune system.

Botox maker Allergan Inc is expected to report a fourth-quarter profit that edges past analysts'
estimates, its first results since signing a deal to sell itself to Ireland-based Actavis for
$66 billion. The company had forecast a 20 percent rise in earnings for the fourth quarter as it
tried to fend off a hostile bid from activist investor William Ackman and Canadian drugmaker
Valeant Pharmaceuticals International Inc. Investors will look for updates on the Actavis deal,
a key factor in how shareholder may vote at Allergan's annual shareholder meeting on March 10.

General Motors Co reports fourth-quarter results and investors will be looking at how the No. 1
U.S. automaker ended the year. They will look for answers on pricing at home, updates on the
company's outlook to return to profits in Europe in 2016.

Weak sales of lung drug Advair is expected to weigh on profits of GlaxoSmithKline in the fourth
quarter, bringing to an end a disappointing year for Britain's biggest drugmaker. The company is
now banking on a $20 billion asset swap with Novartis to revive its fortunes.

The ADP national employment report will likely show private payrolls rose 225,000 in January
after rising 241,000 in December. (0815/1315) Later, the Institute for Supply Management
releases its service index which is expected to have little changed at 56.3 in January.
(1000/1500)

Film and TV company Twenty-First Century Fox Inc, controlled by Rupert Murdoch, is expected to
report second-quarter revenue slightly ahead of analysts' average estimate, according to Thomson
Reuters StarMine data. The company had a slew of hit film releases during the holiday quarter,
such as "Exodus: Gods and Kings", "Night at the Museum: Secrets of the Tomb" and "Gone Girl".
Analysts speculate that despite strong revenue growth, the company's profit could fall due to a
strong dollar.

KFC owner Yum! Brands Inc will issue an update on its recovery in China, when it reports
fourth-quarter earnings. The biggest Western restaurant operator in China had previously said it
could take six to nine months for a recovery in China where sales took a hit from a meat scandal
involving rival McDonald's major regional supplier.

A strong dollar is likely to hurt U.S. life insurer Prudential Financial Inc's fourth-quarter
results as it earns more than half its revenue from international operations, mainly Japan.
Prudential has been pushing to advance its retirement and financial security business. The
company could benefit in the coming quarters from a decision by lawmakers to give the Federal
Reserve leeway to tailor the capital requirements on big insurers.
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